DESPITE bleak prospects in the oil and sector, there are still viable opportunities to invest in the industry within Africa, even from an exploration point of view, the PricewaterhouseCoopers (PWC), has said.

In its report titled: “Fit for $50 oil in Africa”, released recently, the global firm said that the greatest opportunity at the moment seems to be within onshore, conventional plays.

It added that in contrast to offshore finds, onshore prospects are technically much easier to discover due to well-tested geotechnical approaches.

PWC stated: “There are still risks, but onshore exploration is also significantly cheaper. Tullow Oil has certainly taken note of this opportunity as it has announced that it plans to drill six basin openers in onshore Kenya during 2015. Four of them are scheduled in the first quarter. That’s a large portion of its $200 million exploration budget. Kenya, in particular, is also seen to be a relatively stable and fast-growing economy, with its proximity to the markets of India and China being an added benefit”.

According to the firm, four countries in West Africa, which are already highly dependent on oil exports, it means potential austerity measures and budget reviews, but what is the potential impact that a $50 (or less) per barrel oil price could have on fledging new oil producers like those in East Africa?

The drop in oil prices is expected to have a significant impact on Africa, which has been grappling with the effects of long-term poverty, food shortages, HIV/AIDS, and more recently the outbreak of the Ebola virus in West Africa.

It said that the challenges facing oil & gas companies in Africa continue to be diverse and numerous fuelled by regulatory uncertainty, fraud and corruption, poor infrastructure and a lack of skilled resources, among others.

It noted that Africa has one of the highest average finding costs in the world at a massive $35.01 per barrel in 2009, surpassed only by the US offshore fields which came in at $41.51 per barrel, according to the US Energy Information Administration.

“Africa also holds a number of technically challenging hydrocarbon prospects. Examples include deepwater sub-salt exploration activity in West Africa, waxy oil in Uganda as well as offshore exploration leases in South Africa”.

According to the analysis, the following oil & gas players in the market are expected to be most likely at risk from the drop in the oil price: frontier areas, host governments, major gas projects and oilfield service companies.

“Frontier areas around the world are expected to suffer from delayed development in the near-term. These include technically difficult projects that require more spend than conventional production such as deepwater, sub-salt, shale gas and enhanced oil recovery ventures.